The World Bank Board of Directors has approved a new operation to boost the environmental governance of the State of Amazonas by enhancing its fiscal sustainability, and mobilizing finance for forest conservation and a low-carbon bioeconomy. This will provide more economic opportunities and jobs for the State’s population, especially Indigenous Peoples, smallholders, and traditional forest-dwelling populations.
With total resources of US$592.5 million, this Development Policy Financing (DPF) operation is one of the largest project ever financed by the World Bank for an Amazon State.
Named AM Pro-Sustainability, this project will be put into practice through a number of measures. The State of Amazonas will pass new laws to stimulate bioeconomy enterprises, enabling communities and small businesses to earn income from sustainable forest products. Enforcement will be tightened against illegal logging, mining, and land grabbing, while wildfire prevention and response systems will be upgraded to better prepare for climate risks.
The program will also change how state funds are distributed, rewarding municipalities that show stronger environmental results through performance-based transfers. Fiscal rules will be updated to slow the growth of current spending, freeing resources for green investments. In parallel, environmental agencies such as the Secretariat of Environment of Amazonas (SEMA) and the Amazonas Environmental Protection Institute (IPAAM) will be modernized. They will adopt new career structures and hire more qualified staff. These agencies will also build stronger capacity to access climate finance, including jurisdictional REDD+ carbon credits (Reducing Emissions from Deforestation and Forest Degradation).
“This support from the World Bank is a historic milestone for Amazonas. In addition to representing one of the largest financing ever approved for an Amazonian state, it is innovative by linking mandatory environmental commitments, ensuring that investments translate into stronger environmental governance and new pathways for a low-carbon economy that values and protects our forests and the traditional communities who depend on them,” highlighted Eduardo Taveira, State Secretary for the Environment of Amazonas State.
“The AM Pro-Sustainability marks a historic moment for Amazonas, bringing together one of the largest financing ever granted to an Amazon state with environmental protection and fiscal sustainability,” stated Alex Del Giglio, Secretary of Finance of Amazonas State.
“The Amazon is vital not just for Brazil, but for the planet,” said Jorge Coarasa Bustamante, Interim Country Director for Brazil at the World Bank. “This operation promotes environmental and fiscal sustainability while creating incentives to maintain these policies over time. It combines debt relief with investments in innovation, social inclusion, and public sector resilience.”
The program also introduces performance-based grants from the World Bank’s Framework for Financial Incentives (FFI) to the State in the value of US$22million, which are designed to provide an additional incentive to reduce deforestation over time and sustain environmental policies. This grant allocation represents a financial innovation other States can apply.
It aligns with the World Bank’s Country Partnership Framework for Brazil (FY24–FY28) and supports the federal government’s Ecological Transformation Plan, contributing to Brazil’s commitments under the Paris Agreement and global climate goals.
